After 10 months of negotiations, central San Joaquin Valley raisin farmers and packers finally have agreed to a price of $1,100 a ton for the 2016 crop, a drop of 31 percent from the previous year.
Although raisin farmers are taking a hit, they realize the industry is going through several challenges, including a rise in foreign competition.
“The price is awful,” said longtime Fresno raisin grower Ed Fanucchi, a board member of the Raisin Bargaining Association. “This is not economically good for the farmers, but it is the very best deal that the RBA could negotiate.”
The price is awful.
Ed Fanucchi, board member of the Raisin Bargaining Association
Kalem Barserian, the newly hired chief executive officer of the RBA, said Friday that the price for the 2016 crop is a direct reflection of what is happening in the world raisin market, in which California was once the dominant player. That’s not the case anymore.
The worldwide production of raisins has grown 20 percent, Barserian said. And for the first time, Turkey has exceeded California’s total volume with 340,000 tons. California’s 2016 crop is expected to come in at 288,000 tons.
And it isn’t just Turkey that is growing raisin grapes. Other countries making raisins include Iran, China, South Africa, Argentina, Chile, Australia and India, Barserian said. One of the newest players in the market is Uzbekistan, which produced 75,000 tons last year.
“Right now, the world production is 20 percent more than the demand,” Barserian said. “And it’s causing the price to collapse.”
Still, Barserian remains optimistic about the near-term. A veteran of the raisin industry and a former head of the RBA, Barserian has seen price fluctuations before and says the industry will work its way out of it.
Already, there are small signs of a turnaround. Raisin shipments through January are up 2 percent and exports are up 9 percent. Domestically, shipments are up 4 percent this year while the U.S. Department of Agriculture also has committed to buying 19,000 tons in 2017.
The market is the market right now, but we do see things changing.
Kalem Barserian, CEO of the bargaining association
Also helping to stabilize the market is the continued decline in raisin acreage. Barserian said the state’s raisin acreage has dropped from 280,000 acres in 2000 to 165,000 this year, its lowest level in history.
“We are trying to get this turned around,” Barserian said. “And with the acreage coming out and the demand from the wineries expected to be greater this year, I can see the balance of supply and demand coming back in one to two years.”
Barserian, who most recently was the general manager at Lion Raisins, said he was lured back to the RBA to help settle the nearly year-long price dispute. Barserian, who replaced Glen Goto, rejects criticism that he favors packers.
“If there is anyone in the raisin industry that has more experience than I do, then they should step forward,” he said. “I may be 80 years old, but I am still spry and tough. And even the company that I used to work for has taken a hit. The market is the market right now, but we do see things changing.”